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File Photo: Bloomberg
File Photo: Bloomberg

Smartphone production in India could fall by 38-40% in first half of 2020

  • The industry weathered the storm caused by shutdowns in China in the first two months of the year, but the closure of smartphone factories in India in March have “dented recovery prospects” in the first half of the year

NEW DELHI: Smartphone production in India will fall by 38-40% in the first half of 2020, a new report by Cybermedia Research (CMR) estimated.

“Our current India smartphone market assessment points to a bleak picture, with some promise in H2 (second half) 2020," said Prabhu Ram, head, Industry Intelligence, CMR.

According to Ram, the shutdowns caused by the outbreak of the novel Coronavirus in the country will have a “full blown impact in Q2 2020". While the industry weathered the storm caused by shutdowns in China in the first two months of the year, the report said that closure of smartphone factories in India in March have “dented recovery prospects" in the first half of the year.

The Indian smartphone industry faced supply shortages due to shutdown of factories in China in February. Manufacturing here was hurt because the industry couldn’t source components required for production here. Factories in China had shut down near the end of January due to the Chinese New Year holidays, but couldn’t come back up till almost the end of February due to the COVID-19 outbreak.

However, Chinese factories have restarted operations to some extent now, but manufacturing in India has been halted now due to the 21-day lockdown of the country announced by Prime Minister Narendra Modi on March 24.

“On the demand side, with the coronavirus scare, offline channels are massively impacted with sales down by 55-60%. In the face of personal and economic uncertainty, consumer spending is likely to get moderated and remain muted for a major part of this year," CMR said in a press release.

That said, Amit Sharma, manager research at CMR said the company believes that online sales in India have “the potential to pick-up in terms of sales during mid to late Q2" of this year. That though wouldn’t offset the slowdown caused by the total lockdown right now. “Smartphone vendors will take this current crisis to pause, rethink and reposition their product offerings, with more stronger product innovations debuting in H2, 2020," said Ram.

Two of the top five smartphone sellers in India — Xiaomi and Realme — postponed their scheduled smartphone launches yesterday. Xiaomi was supposed to launch the flagship Mi 10 smartphone while Realme was expected to announce a new series of phones under the “Narzo" banner.

The electronics industry in India came to a standstill after the 21 day lockdown announced a couple of days ago. Foxconn and Wistron, companies that produce Apple’s iPhones in the country, also shut operations in the country in accordance with the government's ruling. Indian manufacturer Lava also said it had closed all operations in the country for the time being.

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